Understand Why You Must Opt For An Iva!

By Author: Sadhana Dhanyal
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There are various financial solutions available for those mired in debts. For instance, if you have availed too many loans, you can make use of either debt consolidation loans, Individual Voluntary Arrangements, or bankruptcy. You must consider each solution in the same order. First consider, debt consolidation if you have seemingly manageable debts.

Under this financial solution what happens is that the multiple loans will be combined under one single manageable loan. Thus, instead of making several payments for various loans, you would be making a single payment for one single loan. This will greatly help reduce the monthly payments.

If you think debt consolidation is not a viable solution for you, then you can make use of an IVA. If you are going to choose an IVA, then it is advisable you understand more about it. Basically, an IVA helps cancel up to 75 % of your debt legally. Thus, you will never be required to pay the whole debt back. With this, you agree to pay a single, reduced affordable, monthly payment for a period between 3 to 5 years. After this period, the unpaid part of the debt is written off by ...
... the creditors. Usually, the creditors are in agreement with this.

Moreover, during the repayment period, all interest charges are frozen and all demands for money are stopped. Your creditors will not be allowed to contact you directly. You must understand that an IVA is drawn up by the Licensed Insolvency Practitioner who then administers the arrangement.

An IVA can suit you if your debts exceed £15,000. Moreover, you must be a private individual (not a company) and have a regular income. However, you can be a home owner or a tenant. To qualify for this, you must be a resident of England, Wales or Northern Ireland. There are circumstances wherein you can still qualify for it. You must approach a team of financial experts to find out who else can qualify for an IVA.

IVA vs Short Settlement!

The general perception is that IVA's last for five years which is not always the case. IVA's are meant to be flexible. Where an IVA is based on voluntary contributions from income, the main lenders have come to expect that it will last for five years.

There are many reasons why you should opt for an IVA. They often set up IVAs that are based on the introduction of third party funds and offer creditors a full and final settlement option. There are many cases wherein borrowers have benefited from IVA's.

Sadhana Dhanyal,content developer. For more information: Instant Cash Loans


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